Over the years I have seen very good investors get caught by very bad macroeconomic environments, and very bad investors perform quite well in a good macroeconomic environments. While we can all attribute this phenomenon to just pure luck, today I would like to offer an alternative possibility that many property investors may not be aware of.
First of all, I’d like to admit this alternative viewpoint was not discovered by me. In fact it has been around in just about every major religion and philosophy for thousands of years, but it has largely been forgotten by most of us over the last few decades due to the fact that it cannot yet be scientifically proven.
About 5 years ago I was reminded of this alternative viewpoint of life by a book given to me by a very successful property developer. I have been observing it working all around me, ever since then.
The book is called “The Diamond Cutter". It was written by Michael Roach who was a full-time monk for almost 20 years. With absolutely no business experience behind him, he started a diamond business in New York with $50k of borrowed money. The company became one of the fasting growing manufacturing companies in New York with over 800 staff. He later sold it to Warren Buffet for $250 million a few years ago.
Michael now devotes his time to teaching his secrets to businesses and governments around the world. (You can find a lot of his teachings on YouTube simply by searching his name or visiting the diamondcutterinstitute.com. We have also listed a number of his selected videos on our Investors Direct Facebook page to save you time).
Michael Roach has subsequently written another book called “Karmic Management” to elaborate more on his “Diamond Cutter” principles. I must say that these two books are worth reading a few times over so that you may compare his principles to your actions (not just your understanding). I must say it has delivered tremendous value to me every time I did just that.
For those of you who may not have the time to read his books or watch his presentations on YouTube, I can tell you what his core teachings are. His main theme is about “planting the right seeds” for the outcome you desire. This approach can work for your wealth, your health, your relationships, and just about everything else in your life.
Let me borrow just two of Michael’s examples to show you how “planting the right seeds” comes into the picture.
We often face dilemmas like the following in our daily lives:
- We face a decision about our job such as : should I quit my current job to go to another job, start my own business, or stay where I am and work things out?
- We face a problem of being lonely and wanting to find ourselves a partner in life: so we ask ourselves should I go to the pub to meet someone or would I be better off going to somewhere like a Yoga class?
Most people would normally sit down and logically work out the pros and cons of each possibility in the above two scenarios. We all know that there is no guarantee that any outcome would work out, it is a calculated guess at best.
What Michael Roach suggests in situations like these is to “plant the right seeds” first, before you make a decision on which way to go. Then, after the right "seeds" have been planted, it won’t matter which you choose because whatever you choose will work 100% of the time, not just some of the time.
For example, in the above two scenarios:
- Michael suggests that instead of working out the decision about your own job, you should first find someone else who is having the same problem deciding what to do about their job and help them. By doing this, you plant the right "seeds", so that whatever you choose to do with your own job after that, will work out just fine.
- In the matter of relationships, Michael’s teaching suggest that instead of figuring out how to resolve your loneliness problem, you find someone else who is lonely and resolve their loneliness problem by keeping them company. You could do this by visiting a lonely old person in a nursing home for example or a neighbour you know has very few friends. By doing so, you will have planted the right "seeds", and then wherever you choose to find your next date whether its the pub or the yoga class, it will work out just fine.
Obviously there are a few additional things required to make this work better for you, which I don’t have time to delve into here, but you can find out more from Michael’s videos on YouTube.
However the key message here for everyone is that sometimes when we are faced with difficult situations, the solution may not lie amongst the most logical choices in front of us. In other words, choosing one of the most logical choices can be the wrong approach as they may not matter. Planting the right seeds can help change the entire context in which you are operating, and under that new context, any of these choices could just work.
If I had to come up with a simple demonstration to explain the above paragraph I’d say this. Let’s say someone is asking you to pick the right vehicle that I may like from a red Ferrari, an Ambulance and a Fire Truck. Regardless of which one you pick, your chance of getting it right is only 33.3%. That is because you really don’t know what I want as you may be thinking along the line of say the functions that those vehicles can perform. But if I told you that all I wanted is a red vehicle, i.e. I am thinking about these vehicles in the context of the colour Red, rather than in the context of their functions, you could have picked any vehicle out of the 3, and you will be 100% correct all the time.
You see life can often present us with situations with an apparency of 3 choices (e.g. 3 vehicles). We can insist on seeing these choices only within a certain context (e.g. their functions), but in reality life may really be only presenting us 1 choice about every situation, if we can just find the right context (e.g. the colour Red).
So when we are faced with challenges and difficult decisions, we may have completely missed the point if we are too busy making a selection out of many options rather than discovering a new context.
If I were to apply Michael Roach’s teachings to the field of wealth creation, when we are faced with wanting to improve our financial position, some of the most common questions people tend to ask would be along these lines:
- Should I invest in shares or properties? (the context of asset class)
- Should I get into the market or stay out of the market? (the context of market)
- Should I buy or sell my investment? (the context of timing)
- Should I start my own business or continue to work as PAYG? (the context of work)
They all seem very logical and justified questions within their own contexts. But according to Michael Roach’s teachings instead of answering them we should first start “planting seeds”, by finding a new context where any of these choices would be right. So we should look for someone who also needs to improve their financial position, and try to help them as much as we can. In doing so, we will have planted good "seeds", then whatever we decide to do after that will work out just fine.
When I first read this a few years ago, I found it very hard to believe, so I started observing things happening around me. I have been lucky to have had thousands of cases of our clients and associates to observe, on top of my own personal situations. I must say that I find this all to be very true.
The following are just a few examples I have observed:
- Builders who put a lot of effort into building good quality homes for other people tend to have good quality homes themselves;
- Staff who are keen to share their knowledge and coach other junior staff, tend to find themselves getting more knowledgeable;
- People who are willing to help their friends with relationship issues at home, tend to have better relationships at home themselves;
- Clients who are keen to help their friends and family to do better financially, tend to find their own financial positions getting better;
The list can go on and on, but to put it simply “planting good seeds” means “helping the people who want the same things as you to get what they want, and you will get what you want”.
So according to Michael Roach’s teaching:
- If you want to run your own business one day, help someone (including your current boss) to run their own business now;
- If you want to have better quality staff as a business owner, help other businesses (including your competitors) to have better quality staff;
- If you want to have more customers, help other businesses (including your competitors) to have more customers;
So if I expand on that idea for our clients, I would say that if you want financial freedom for yourself, don’t start with what investment strategy or which asset to buy for yourself. Instead you should start with planting the right "seeds" by helping other people who also want financial freedom to achieve their financial freedom, then your own financial freedom can be achieved with ease as well.
Now some people may say "but I don’t have the financial capacity or technical know-how to help my friends to become financially free, and I don’t see how my job as a dentist or software programmer would help me do that."
When I talk about “planting the right seeds” for your own financial freedom, you could simply perform an act of kindness such as improving your friends’ awareness by telling them about the possibility of achieving financial freedom. This could help you by planting a very powerful seed. Whether they can eventually achieve that may be out of your control, but your thought, intention and action to help that person who wants the same thing as you to get what they want, would have helped you plant the right seed for your desirable outcome.
Unfortunately the investment industry has created too many contexts for many people to make their selections. Hence investors can become too caught up with the "right" investment strategies, the "right" advisors and the "right" market timing, and overlook the universal law of “what goes around, comes around”, which is the ultimate context for making any of your selections 100% right all the time.
In short, whatever desirable outcome you want to achieve, find someone else who wants the same thing and help them achieve it. Try it, it works!